Grau Perspective | 3/20 | 30F 5.625% 15F 5.125%

 

Yesterday, Fannie and Freddie were given the OK to lend out another $200 billion in mortgages.  This is a good thing for the mortgage market.  With the Fed giving $200 billion of liquidity last week to ”upgrage” mortgage backed securities and $200 billion to the largest buyers of mortgages yesterday, hopefully some of the mortgage liquidity concerns will be eased.  Now we need investors to figure out how much risk premium really needs to be charged for average credit scores, low equity, adjustable rates, jumbo loan amounts, 2nd liens, or limited documentation.  Until home values stabilize I expect to see continued additional tightening in any “risk” category.

Today the Initial Jobless Claims, LEI, and Philadelphia Fed Index were reported.  The Jobless Claims came in at 378,000 implying that a recession may already be here.  The Philly Fed Index was -17.4.  That’s not good, but better than expectations.  The LEI met expectations at -0.3%.  LEI is an Index of Indexes and not really a market mover.  The bond market closed at 2:00pm today and is closed tomorrow for Good Friday.  It should be nice to take a breather and prepare for next week.  This market is not for the faint of heart. 

Upcoming Economic Reports for March 24 - 28th

Existing Home Sales | Reported [3.24] | Est 4,860,000 | Prior 4,900,000 | MODEST

Consumer Confidence | Reported [3.25] | Est 75.0 | Prior 75.0 | MODEST

Durable Goods | Reported [3.26] | Est 1.0% | Prior -5.3% | MODEST

New Home Sales | Reported [3.26] | Est 580,000 | Prior 588,000 | MODEST

Crude Inventories | Reported [3.26] | MODEST

GDP | Reported [3.27] | Est 0.6% | Prior 0.6% | MODEST

GPD Chain Deflator | Reported [3.27] | Est 2.7% | Prior 2.7% | MODEST

Initial Jobless Claims | Reported [3.27] | MODEST

Personal Consumption YOY | Reported [3.28] | Prior 2.2% | ELEVATED

Personal Income | Reported [3.28] | Est 0.3% | Prior 0.3% | MODEST

Personal Spending | Reported [3.28] | Est 0.2% | Prior 0.4% | MODEST

Personal Consumption FEB | Reported [3.28] | Est 0.3% | Prior 0.2% | ELEVATED

Consumer Sentiment | Reported [3.28] | Est 71.0 | Prior 70.5 | MODEST